German chemical and consumer goods major Henkel AG & Co KGaA (ETR:HEN3) will buy wind power from Ørsted A/S (CPH:ORSTED) to meet 100% of its power consumption in the US, it was announced today.
The two parties have entered into a virtual power purchase agreement (PPA) with a term of over 10 years. It relates to half the annual output of a new wind park, estimated at about 600,000 MWh, that will be built in Bee County, Texas. The facility is scheduled to be hooked to the grid in early 2022.
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"In addition to generating clean energy, the wind farm will provide a significant source of new revenue for the local government, schools, and landowners," commented Philip Moore, Senior Vice President at Ørsted.
The deal with Henkel aligns with the German group’s goal to become a climate-positive company by 2040. Henkel wants to cut the carbon footprint of its production by 65% by 2025 and 75% by 2030 from a 2010 base year, and source all of its electricity from renewables by the end of the decade. To do so, it will rely on on-site green energy production, direct purchases of power and virtual coverage as in this case.
In the US, Henkel has more than 30 production facilities.
In December 2019, Ørsted sealed a corporate PPA with another German chemicals company -- polymer materials supplier Covestro AG (ETR:1COV). At the time, the Danish energy company referred to the contract as the world's largest offshore wind PPA.